Apple's campaign starring a 'Genius' from its stores didn't live up to the marketer's usual efforts.

For Apple, Marketing Is a Whole New Game

Here's What the Company's Doing to Regain Its Edge

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TBWA/Media Arts Lab was presenting fresh work to its signature client when the Apple executive across the table stopped the proceedings and handed over another idea, saying simply, "We like this better."

The favored ad was created by a rival agency: Apple's in-house shop.

Recounted by a creative who has worked on the brand recently, it's a scene that would have been unfathomable before the death of Apple's creative heart and soul, Steve Jobs, roughly two-and-a-half years ago. But today Apple is thinking differently about its approach to advertising and marketing. Very differently.

Amid criticisms that it has failed to innovate, Apple is increasingly taking marketing into its own hands. It's madly building an internal agency that it's telling recruits will eventually number 1,000 -- the size of Grey Advertising. It's pitting TBWA/MAL against this internal agency with "jump balls" to mine the best creative ideas, a controversial tactic with outside agencies, let alone an internal one. It's going after some of adland's boldest-faced names to staff its in-house shop -- in some cases, it's even poached executives from TBWA/MAL. And, in what once would have been seen as a sacrilegious breach of the Apple-MAL bond, it's been inviting some of the ad industry's top shops to pitch on major projects.

But Apple's grand ambitions so far appear to be just that. The company that only a decade ago was the creative standard is finding a frosty reception in some creative corners. "I don't feel that energy from Apple," said one top agency exec who was approached for a post. "The revolution has come and gone, and I'm not sure a job at Apple would be a creative opportunity. If I were going to go brand-side, there are a lot more interesting companies I'd rather work for, like Coke or Pepsi."

Apple and TBWA/MAL declined to comment for this story. But interviews with at least two dozen current and former employees of Apple, TBWA/MAL, ad-industry professionals approached by the company and those who have worked with Apple reveal a powerful brand searching to regain its creative edge.

Once the ad industry's maverick, the company has struggled to deliver a campaign that lives up to the "Think Different" legacy, marred by missteps like the Olympics 2012 "Genius Bar" ads that quickly got pulled.

Meanwhile, other tech marketers have eclipsed Apple with their creativity and cojones, a fact not lost on the Cupertino company.

An email to TBWA/MAL President James Vincent from Apple Senior-VP Global Marketing Phil Schiller uncovered during the much-publicized patent lawsuit between the tech giant and rival Samsung said: "I watched the Samsung pre-Super Bowl ad that launched today. It's pretty good and I can't help but think these guys are feeling it (like an athlete that can't miss because they are in a zone), while we struggle to nail a compelling brief on iPhone."

The words could be a call to arms or represent a certified marketing creative crisis. Meanwhile, in addition to surging Samsung, Google has proved to be one of advertising's most-emulated storytellers, with traditional ads and online experiences that deftly weave humanity into its brand message. In May, Google kicked Apple out of the top spot in BrandZ's annual ranking of Most Valuable Global brands, a position Apple held for three consecutive years.

Apple clearly sees the urgency.

Dialing numbers
In April, a Wall Street Journal article during the patent dispute between Apple and Samsung brought to light an early 2013 email from Mr. Schiller to CEO Tim Cook that said the brand "may need to start a search for a new agency. …We are not getting what we need from them and haven't been in a while."

Credit: Taylor Callery for Ad Age

Ad Age learned that since at least the beginning of 2013, Apple has been calling adland's hottest shops to work on various projects. One of those was to San Francisco-based Pereira & O'Dell, which conceived the Emmy- and multiple Cannes-Lion-winning "Beauty Inside" social film for Intel/Toshiba. According to Co-Founder/Chief Creative Officer PJ Pereira, Apple reached out to his agency over the past year for two projects, at least one of which would have been long-term. "We turned them down because we have relationships with both Intel/Toshiba and Skype (owned by Microsoft)," he said. People close to the situation say that Apple continues to call other top creative agencies in on projects.

In April, the brand went on a digital hiring spree and added four shops to its roster: WPP's AKQA, Interpublic's Huge and indie agencies Area 17 and Kettle (see Ad Age, April 9, 2014). Under Mr. Jobs' watch, the brand was famously "traditionalist" when it came to advertising, especially for a tech company. For the most part, its standout work was confined to TV and print. The addition of the shops suggests the brand is trying to bring more creativity and innovation to its digital marketing.

Last fall, Ad Age reported that Apple was looking to build out its in-house team to 600 people from 300. Today, according to a high-level agency exec recently approached, Apple has upped that number to a massive 1,000. By comparison, Google's lauded Creative Lab, which steers some of the brand's most high-profile work, is said to have fewer than 100 people, not all of whom are full-timers. Google's marketing, however, isn't done solely out of the lab.

To staff its internal agency, Apple is casting its net wide. One senior agency exec noted that within the same six-month period of being contacted by Apple, a number of other senior creative execs at both this person's agency and other shops had gotten calls. The broad outreach gave the impression "they were just dialing numbers." Another upper-level agency exec was unclear as to how many posts Apple has been trying to fill, but said, "All I know is all my talented friends have been approached. Apple has its sight on some of the best talent."

For various reasons, however, top talent has resisted the pitch.

In addition to Apple's flagging creative reputation, another recruiting hurdle for the company is its cost-prohibitive location. "Do you know how expensive Cupertino is?" one exec said. "Just run property values, and even on an Apple salary, it would be tough."

To be sure, Apple still has plenty of appeal. "There are probably only a handful of places that have that level of expectation of quality and can afford to pay people to do work to make it successful," said another exec contacted by Apple recruitment.

The brand has managed to snag a few top names. Among them is Bill Davenport, the Wieden & Kennedy partner who helped to launch the agency's entertainment unit, W&K Entertainment, and earlier in his career steered notable projects for Levi's and Nike, including the latter's famous "Bo Knows" spot. It's not yet known what role he will play, but people close to the situation say he was hired to lead in-house production. Executives close to the business said Apple has been beefing up production beyond Mr. Davenport and is looking to create a full-function production department capable of handling not just creative but business-side affairs.

In April, branding agency Wolff Olins' Global CEO Karl Heiselman told Ad Age he would be joining Apple in a marketing-communications role. Mr. Heiselman had been a design contractor at Apple in the 1990s before Mr. Jobs returned to revitalize the company. Another addition is Tyler Whisnand, a former Wieden & Kennedy, Portland, creative director who worked on notable campaigns such as Levi's "Go Forth" and Nike's award-winning "Chalkbot." People familiar with the situation say Larry Frey, another W&K creative alum who co-founded 180 Amsterdam and is also a commercial director, has joined the in-house team.

In March of this year, Brian Rekasis joined as director, worldwide marketing and communications. He recently served as senior VP-exec producer at integrated-production company B-Reel, a former Creativity Production Company of the Year known for its sophisticated multiplatform campaigns for marketers such as Intel, Doritos and Google.

Meanwhile, Apple has poached a number of former MAL staffers, including Creative Directors Hector Muelas and Ricardo Viramontes, and Creative Director Larry Corwin, who previously held creative director positions at Google, BBH, BBDO and Goodby Silverstein & Partners.

Apple has tapped former Madison Avenue recruiters to ramp up its head-hunting efforts. Among them, Linda Waste, a senior recruiting manager who previously worked at DDB Chicago, Energy BBDO and Euro RSCG; and senior recruiter Greg Christman, former talent director at TBWA/MAL and recruiter at Google Creative Lab.

At the same time, according to people familiar with the situation, TBWA/MAL has become more aggressive in its own recruiting.

While hiring efforts are in full force, Apple has changed its approach to getting creative work as it continues to increase its ad spending. In 2013, its advertising budget rose to $1.1 billion, up from $1 billion in 2012 and $933 million in 2011.

Much of the purview over Apple advertising lies with Hiroki Asai, who came up at the company through package design -- and is said by one creative to be "the creative director of all things internal" who has "really evolved into this very powerful person" at Apple. But his job is more complicated now than it once was, given the expansion of the internal agency and subsequent shootouts. In addition to overseeing much (if not all) creative internally, he is reportedly also one of the main client contacts for TBWA/MAL. "He's kind of judge and jury," said the creative.

'Most disrespectul thing'
Outside of controversial emails, Mr. Schiller plays a leading role as well. People familiar with the situation say it's under him that Apple has introduced -- or at least intensified -- a competitive dynamic between its in-house team and TBWA/MAL through creative shootouts. That's the type of warfare typically found between competing shops, not agency and client.

One creative who worked for Apple said the shootouts began last summer when the company was prepping to launch the iPhone 5C. This creative noted that it appeared as though the shootouts would continue, but not every project will go that route. For instance, Apple's holiday ad, featuring a loner teen who seems to pull away from his family's holiday festivities but ultimately turned out to be creating a surprising gift, was assigned to Media Arts Lab.

Among the first shootouts last summer, according to one creative close to the business, was for the "Intention" film, which debuted at last year's World Wide Developer's conference. TBWA/MAL's work won, earning a lot of attention in the design and fanboy community for reclaiming Apple's authoritative voice.

The addition of new agencies and the shootouts reflect what one person close to the situation said was Mr. Schiller's preference for having as many people working on the business as possible.

According to one former TBWA/MAL creative, this is not the way the partnership used to work. "It was never at this level before," the creative said. "It is one thing to open up your account to a bunch of different agencies, but to build out your own troops, give them the brief months in advance and then give it to the agency -- it's the most disrespectful thing."

One insider said "jump balls" have always been part of Apple's approach, but the process has become more apparent over the past year or so because, more often than not, "the internal teams have won."

"For whatever reason, MAL is seen as part of the old way of doing things," said a creative who has worked on Apple marketing. "The people running MAL made sense with the way Steve Jobs liked to work. They had Wednesday reviews, they'd fly up to Apple and show work, and there was a process with Jobs. Now that he's not there, they're not innovating because they're only doing what they know."

Apple originally made its creative mark with longtime agency Chiat/Day, and later, Media Arts Lab. Part of the TBWA agency network, the latter evolved from of the longtime creative partnership established at Chiat between its founder, Lee Clow, and Mr. Jobs, whose collaboration birthed iconic ads such as the "1984" Super Bowl spot and the 1997 "Think Different" campaign. TBWA/MAL kept up the creative pace with more recent winners including the "Mac vs. PC"campaign.

Fate of TBWA/MAL
Execs approached by Apple for internal jobs were told that TBWA/MAL would continue to be part of the picture -- but in what capacity remains unclear. Some say it will need to fill the service-side duties Apple can't handle internally. Others paint a bleaker picture of the shop's future with Apple.

For now, however, it seems it will remain a creative player for Apple, but as part of a growing, more competitive and more comprehensive marketing mix.

One person close to the matter said Apple's in-house marketing leads have permission from Messrs. Cook and Schiller to scale its marketing and communications resources to catch up to its business growth over the last few years. "The volume of work exceeds the resource," said the executive. Every Apple contractor, including TBWA/MAL, is "max busy."

"They said they have so much going on from a marketing-communications standpoint that MAL is part of their plan, but their expectations for marketing are much greater than what MAL is built to do," said one top exec approached for a post. "They're just expanding their practice. They were very honest that MAL was part of the plan, they're just not the only part of the plan."

It's hard to say whether the new approach has directly led to better product, but in the last few months, the marketer has clearly turned out better ads, work that helps forgive the "Genius Bar Guy" faux pas.

Recent ads created by the internal agency include the 5C launch spot dubbed "Greetings." It also handled last fall's iPad air spot "Pencil," as well as another that featured a voice-over of Robin Williams from the movie "Dead Poets Society." Meanwhile, outside of "Intention," TBWA/MAL delivered the brand's recent Pixies-fueled ad "Powerful" and the charming holiday spot.

The broader creative picture shows that Apple is lining up as much talent -- on all fronts -- to inject innovation back into its game. Outside of marketing and communication, in October of last year, Apple generated buzz when to revitalize retail it hired Angela Ahrendts, the Burberry CEO known for bringing the once-stodgy brand into the modern age with groundbreaking digital initiatives. The recent $3 billion acquisition of Beats also brings music entrepreneurs Dr. Dre and Jimmy Iovine into the boardroom as senior advisers on content.

Big moves, all proving Apple's determination to up its game. But reinvention won't be an easy process for the company or the agency that helped build it. To borrow a phrase from Apple's "Intention" film, "there are 1,000 nos for every yes."

Contributing: Alexandra Bruell and Shareen Pathak

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